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What do investors use EPS for?
to evaluate profitability of a company
simple capital structure
if corp only has common stock outstanding, also can have preferred stock outstanding but no conversion
complex capital structure
if corp only has any dilutive security outstanding
EPS
(NI - preferred dividends)/weighted average common shares outstanding
how does cumulative preferred stock affect EPS
always substracted even it dividend is undeclared
how does noncumulative preferred stock affect EPS
only subtract if declared
antidilutive securities
securities that upon conversion/exercise increase EPS
EPS = _____ -_____-_____
basic eps - impact - impact of options, warrants, and other dilutive securities